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What is Support Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. The logic dictates that as the price declines towards support and gets cheaper, buyers become more inclined to buy and sellers become less inclined to sell. By the time the price reaches the support level, it is believed that demand will overcome supply and prevent the price from falling below support.

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Looking for Crucial Support

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What is Resistance Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The logic dictates that as the price advances towards resistance, sellers become more inclined to sell and buyers become less inclined to buy. By the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising above resistance.

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More Example on Resistance

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Properties of Valid Support and Resistance The Support and Resistance should not be broken for at least for 1 month period.

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Number of Touches The more number of touches the more the Valid Support/Resistance

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Number of Touches

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Why Resistance becomes support Trader 1 : Trader is going Short at Crude oil at and was having fun seeing the prices fall down.

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Resistance becomes the Support Now the Market Break out of the Resistance Zone and AS USUAL TRADERS WILL NOT PUT THEIR STOP LOSSE IN PLACE and they will be worried and sad to cover their position. Turns buyer at Break even.

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Resistance becomes the Support Longs are happy but sad because they did not bought more so after break out near Previous Resistance they add more position

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Resistance becomes the Support Then there were Guys like me who were just waiting for breakout to happen once it is in place we will try to Buy Market at Near new Support Level

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Support Becomes Resistance

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What is Fibonacci number Na…………………………………………………………..

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What is Fibonacci Number The Fibonacci number sequence (1,2,3,5,8,13,21,34,55,89,144,...) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next number is 61.8 percent, which is a popular Fibonacci retracement number. The inverse of 61.8 percent is 38.2 percent, also used as a Fibonacci retracement number.

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Expansions - Extensions When a rebound from retracement of a previous trend exceeds the previous high (in an uptrend) or low (in a downtrend), erase the old retracements and apply extensions.

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Expansions - Extensions

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Plotting Fibonacci Expansion For plotting the Fibonacci Expansions you need 3 points, and the basic technique for an uptrend, is to plot it off a Low, and High and a Higher Low (or for down trends - a High, a Low and a Lower High).

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Plotting Fibonacci Expansion We measure the distance from Point A to Point B. However, we can’t project price targets until Point C has been established. Only when Point C has been formed do we have the necessary three swing points. In short, we identify a trend that has started and pulled back, forming Points A and B, and wait for Point C to form. Once Point C has formed, we plot the Fibonacci Expansion Tool on Point A, Point B, and Point C.

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Fibonacci Multipliers Application Assume B-A =.382 Multiplier of.382 = If B-A = 100 points, then the target becomes Add to A The target is very aggressive B C A